REPORT TO THE SELECT COMMITTEE ON FINANCE ON THE YD QUARTER PROVINCIAL BUDGET REPORT 2005/2006 CONDITIONAL GRANTS AND CA.PITAL EXPENDITURE

Presented on behalf of the MEC for the Limpopo Department of Health and Social Development the Honorable MR. SC Sekoati by the Acting HOD Dr. M Nkdimeng on 17th January 2006

 

Capital Budget - MTEF allocation

Budgeted over the MTEF

2005/06

2006/07

2007/08

In R' 000

Budget

%of total

Budget

%of total

Budget

% of tota I

Buildings and other Fixed

355,110

88.6%

238.597

68.9%

271,608

71.0%

Machinery and Equipment

141,579

11.4%

173,091

31.1%

179,416

28.9%

Software and intangibles

9,400

0.0%

-

0.0%

-

0.0%

Local and Foreign Aid assistance

-

0.0%

440

0.0%

463

0.1%

Total Budget

506,089

100.00/.

412,128

100.00/.

451,487

100.00/.

Accumulative Expenditure

506.089

918.217

451 ,487

%of total

Capital Expenditure

2001/02 to 2004/05

4 years

1,414,088

50.8%

Capital Budget

2005/06 to 2007/08

3 years

1,371,676

49.2%

Total period

2,785,764

 

Capital Actual Expenditure

nine months ended 31 December 2005

Budgeted over the MTEF

2005/06

%

in R' 000

Budget

Spent

Spe nt

Buildings and other Fixed

355,110

110,112

31.0%

Machinery and Equipment

141,579

66,984

47.3%

Software and intangibles

9,400

220

2.3%

Total Budget

506,089

177,316

35.0%

 

 

Capital Expenditure

The conditional grants have been the major source of the

capital expenditure of the department with an average of 53% of the funds used being provided from the conditional grants and 47 % from Equitable Share.

The equitable share has provided only 20% of the funds for buildings with 80% being sourced from the conditional grants.

The Hospital Revitalization grant together with the Provincial Infrastructure Grant has provided the bulk of the capital used for facilities upgrades, maintenance and provision of new clinics.

This trend is continued with over the MTEF.

 

Conditional Grants - 2001/02 to 2004/05

Actual expenditure versus Budget

In R . 000

Limpopo Health. Vote 7

2001/02

2002103

2003/04

2004/05

Conditional Grants

Budget

Budget

Budget

Budget

Hospital Man & Quality Imp

4,000

10,451

13,337

15,388

HIV&AIDS

7,458

23,905

28,962

77,430

Integrated Nutrition Prog

124,331

129,919

158,155

20,320

National Tertiary Services

79,008

76,256

54,287

46,878

Health Prof Train & Dev

33,551

45,101

41,981

51,805

Hospital Rehabilitation

88,000

126,821

96,239

106,463

Pro'o1nciallnfrastructure Grant

38,993

58,888

83,066

Medico Legal

1,000

Drought Relief = Cholera / Malaria

6,100

Total Budget

336,348

451,446

452,849

407,450

Less - Roll overs

-65,884

-71,831

-21,279

-

Less Adjustments

-1,705

-39,268

-1,000

-

Allocations = DORA

268,759

340,347

430,570

407,450

Actual Expenditure

262,684

431,006

392,950

373,105

% of Total Budaet spent

78.1%

95.5%

86.8%

91.6%

Unspent funds

73,664

20,440

59,899

34,345

Actual Transfers Received

336,348

451,446

452,849

392,076

% of funds received

100.0%

100.0%

100.0%

96.2%

 

 

CONDITIONAL GRANTS

Allocations

The Infrastructure Grant is a Provincial Treasury grant

The conditional grants has shown a steady increase over the past four years to grow by 68% or R242.7 million between 2001/02 and 2004/05, excluding the grant for Primary Schools Nutrition Programme that has been transferred to Education as from April 2004 onwards.

The allocation again showed a sharp increase from the R407 million in 2005/06 to R614.7 million for the current financial year.

This is mainly due to the increase for HIV & AIDS (R48m) as well as Hospital Revitalization (R106m) with all other grants also growing.

A roll over of R34.345 million was also received in the current year to make a total of R 649 million available.

The MTEF sees a total of R564 million for 2006/07 and R616 million for 2007/08 being available to the department.

The Hospital Revitalization that reduces to R142m from the current R213 m. These additional funds were allocated due to the departments ability to utilize the grant in the past.

An amount of R 10 m has been surrendered for the current year.

 

Transfers

A full transfer was received for the budgeted amount available for the period 2001/03 to 2003/04.

In the 2004/05 year the department did not receive R15.372 million of the R407.4 million allocated by receiving only R392.7 million or 96.2% from National Health via the Provincial Treasury.

The transfers were stopped when expenditure for the third quarter was not according to the expected level.

This resulted in the department surrendering an amount of R 15.372 million less than the actual under expenditure at year end, as these funds were not received and could thus not be paid back.

The Provincial Treasury did roll over the funds to 2005/06

 

Expenditure

The department did spend an average of 88.6% of the available budget on conditional grants over the past four financial years

This includes the MTEF allocation as per DORA as well as Adjustment Estimates and Roll-overs

The expenditure of the total available budget for the period was as follows:

01/02 = 78.1 % 02/03 = 95.5%

03/04 = 86.8% and 04/05 = 91.6%

The expenditure achieved demonstrates the departments ability to utilise the conditional grants despite the challenges of :

- procurement issues regarding items on tender,

- normalization of expenditure that is captured on the equitable share - development and implementation of approved Business plans

- limiting conditions imposed on the use of the funds

 

Health - Conditional Grants MTEF - Allocation per GFS 2005/06 to 2007/08

In R '000

T

I

Budgeted over the MTEF

Limpopo Health - Vote 7

2005106

2006107

2007108

Conditional Grants

DORA

% Increase

DORA

% Increase

DORA

% Increase

above 04/05

above 05/06

above 06/07

Specialised Health Services

17,457

13.4%

18,505

6.0%

19,430

5.0%

HIV&AIDS

125,899

62.6%

175,861

39.7%

184,654

5.0%

Integrated Nutrition Prog

22,344

10.0%

-

-100.0%

-

0.0%

National Tertiary Services

71,182

51.8%

71,579

0.6%

71,648

0.1%

Health Prof Train & Dev

72,411

39.8%

72,411

0.0%

76,032

5.0%

Hospital Rehabilitation

212,918

100.0%

123,698

-41.9%

160,690

29.9%

Cholera I Malaria

Total Budget = OORA

522,211

53.2%

462,054

-11.5%

512,454

10.9%

 

 

Conditional Grants Actual expenditure as at 31 December 2005 of the financial year 2005 / 06

Budgeted over the MTEF

in R '000

I

Llmpopo Health. Vote 7

2005/06

April to

%of

Conditional Grants

DORA

Roll over

Total

% Increase

December

budget

available

above 04/05

Expenditure

spent

Hospital Man & Quality Imp

17,457

4,387

21,844

13.4%

8,139

37.3%

HIV&AIDS

125,899

8,103

134,002

62.6%

60,348

45.0%

integrated Nutrition Prog

22,344

6,249

28,593

10.0%

15,971

55.9%

National Tertiary Services

71,182

4,222

75,404

51.8%

21,683

28.8%

Health Prof Train & Dev

72,411

72,411

39.8%

55,196

76.2%

Cholera I Malaria

-

2,718

2,718

0.0%

935

34.4%

Hospital Rehabilitation

212,918

8,666

221,584

100.0%

79,588

35.9%

Total Budget = DORA

522,211

34,345

556,556

53.2%

241,860

43.5%

 

 

Conditional Grants Actual expenditure as at 31 December 2005

Budgeted over the MTEF

In R '000

Llmpopo Health. Vote 7

2005/06

April to

Expenditure

Additional

%01

Conditional Grants

Total

September

December

Expenditure

budget

available

Expenditure

Total

Last Quarter

spent

Hospital Man & Quality imp

21,844

4,414

8,139

3,725

37.3%

HIV&AIDS

134,002

10,335

60,348

50,013

45.0%

Intergrated Nutrition Prog

28,593

6,704

15,972

9,268

55.9%

National Tertiary Sennces

75,404

14,862

21,683

6,821

28.8%

Health Prof Train & Dev

72,411

36,101

55,196

19,095

76.2%

Cholera I Malaria

2,718

-

934

934

34.4%

Hospital Rehabilitation

221,584

33,975

79,588

45,613

35.9%

Total Budget - DORA

556,556

106,391

241,860

135,469

43.5%

 

 

 

Expenditure 2005/ 06

The department has managed to increase the expenditure per quarter as follows:

- 6.27% = R40.67m in the first quarter

- 22.1% = R 106.391m in the second quarter

- 43.5 % = R 241 860 in the third quarter

The inability of the department to secure Tenders for the purchase of Medical Equipment has resulted in limited expenditure to date on the following grants:

. Hospital Management and Quality Improvement at 37.26%,

. National Tertiary Services at 28.76%

The tenders for Medical Equipment was finalised in November and expenditure is expected to substantially increase in the last quarter as the business plans include the assets required.

Equipment has been ordered and deliveries are awaited

 

 

Expenditure - HIV & AIDS

The business plans for HIV & AIDS was adjusted in an attempt to ensure that service delivery is speeded up, the revised plans were forwarded to National Health in November 2005.

Some R20 million was transferred to NGO's during October 2005, after proper screening the NGO's ability to deliver on the part of the Comprehensive HIV&AIDS programme that they are expected to deliver service on.

Personnel Expenditure is not expected to increase as health professional posts catered for are not being filled as anticipated = under spending of R 11 m or 8.2 %.

Expenditure increased from 7.7 % in Sept. to 45.3 % in Dec 2005

The expenditure should be increased once a system to account for medicines and tests used on HIV&AIDS related treatments in the hospitals is agreed upon.

Identifying the medicines used for the treatment of Aids Patients remains to be a challenge as all medicines are procured at a central point on the equitable share and have to be journalised to capture the expenditure under the Conditional Grant.

 

 

Future interventions - HIV & AIDS continued

The following funds have already been committed I and other orders will be placed following the adjustment of the plan-

- R3.5 m for nutritional supplements at 8 ARV sites

- R5 m for nutritional supplements centrally - Feb 06

- R3.2 m for equipment

- R13 m for VCT training and HBC kits

- It is estimated 21.5 % of the NHLS costs are HIV&AIDS related

- Purchase of containers for office space of R 3.4 m via the Do Education Tender is being finalised

- R3 to purchase an available building for Resource Training Centre as per the Comprehensive Plan

 

 

 

Expenditure and interventions - I N P

The participation on the National Tender RT 289 has not been available to the department.

R 2 m for food supplements committed in November, purchased via quotations.

R 1.5 m for equipment already delivered, invoices awaited.

An additional R 2 m for equipment has been ordered.

Future participation on RT 289 is being negotiated to streamline procurement.

Vitamin A supplements (tablets) is being procured via the Pharmacy Depot to comply to contract requirements including the Bar Coding, to the value of R 700 000 to year end.

 

 

Expenditure and interventions - I N P cont.

The use of multi vitamins was also slowed down due to contract

requirements, R 1.5 m yet to be procured.

Skills development for food service management personnel to take place in February 2006 for R 2 m and the programme will continue into the next financial year.

Backlog of R 600 000 in Greenery projects in Bohlabela district due to un-availability of the system.

R 3 m yet to be spent by year end on all Greenery projects.

HPTD Grant

Expenditure on the HPTD Grant has been above the average and no

problems is foreseen in spending the funds on service delivery in this regard, as equipment tenders are now in place.

 

 

Expenditure and interventions HMQI

The training of management is ongoing but availability of management for training over extended periods are restrictive.

Personnel costs are below norm due to vacant posts.

The purchase of equipment R 2.8 m has not taken place-

- Computers

- Filling systems - Delay in the implementation of the Information and Records Management tender

- lack of equipment tender for medical equipment that was only finalized in December

 

 

Expenditure - NTSG

Purchase of equipment has been delayed due to the unavailability of a

tender that is now being finalised, has resulted in low expenditure patterns but an amount of R 32 m has since been committed.

It is envisaged that the full budget for Equipment of R 46 m will be utilised

Personnel costs for Specialists employed on the equitable share has been identified to be funded from this grant for the first three years of their employment and the Grant does carry these costs.

Expenditure - Cholera I Malaria

The full amount of R 2.718 m received as a roll over will be spent during the year on

- Pesticides for Malaria control

- Vehicles for Vector control have been ordered

- In response to the recent instances of reported Malaria cases R1.26m has been committed against the grant.

 

 

Expenditure Hospital Revitalisation

The department surrendered Ri 0 m to National Health with a request to increase the allocation for the 2006/07 year with the same amount due to the projects being completed in the following financial year.

This grant is fully committed but expenditure is dependant on the progress made by contractors.

The capacity of emerging contractors together with the availability of building materials especially Building Bricks has been a constraint that impacts on the timeous completion of the current contracts Upgrading of the filing system at Revitalised Hospitals to the value of R 4.6 m has been ordered.

The department Is responsible for the planning of the hospital revitalisation projects while Dept of Public Works takes control of the project implementation

It often occurs that contractors are late to take over sites due to delays beyond the control of the Dept of Health

 

 

THE END